2023 Solar Incentives Guide for Montvale, NJ - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Montvale?

Source: https://www.dsireusa.org/

Solar incentives are designed to encourage homeowners to switch their home over to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Different types of incentives, such as discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the New Jersey government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement in place with your Montvale utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you may be refunded a percentage of the value.
• Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you ignore the value added by your solar system when you're calculating the amount of property tax you need to pay on your house.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar system meets the threshold (generally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.

The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property you own for you to claim the credit. Originally, the ITC covered 30% of all system costs (panels, equipment, labor and accessories), although the amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

To best understand how the ITC may apply to your situation, reach out to your local Montvale solar panel installer and ask for more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, talk to your local Montvale solar installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Like with federal incentives, these may include rebates, tax credits and more. Incentives may be given by the state of New Jersey, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Montvale

There are a variety of solar incentives: those provided by local utility companies, those provided by the New Jersey government and those provided by the federal government, to name a few. Solar energy use has grown enormously in the last 15 years, thanks to these incentives. Your local Montvale solar panel installation expert can provide you with more details about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.